UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2008, OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
COMMISSION FILE NUMBER 0-10235
GENTEX CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2030505
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 N. CENTENNIAL, ZEELAND, MICHIGAN 49464
(Address of principal executive offices) (Zip Code)
(616) 772-1800
(Registrant's telephone number, including area code)
________________________________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No[ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [X] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [ ]
(Do not check if a smaller reporting company)
Indicate by a check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PROCEEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding
Class at October 22, 2008
----------------------------- -------------------
Common Stock, $0.06 Par Value 139,687,394
Exhibit Index located at page 17
Page 1 of 21
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2008 December 31, 2007
(Unaudited) (Audited)
------------------ -----------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $283,333,742 $317,717,093
Short-term investments 54,913,589 80,271,688
Accounts receivable, net 70,944,456 64,181,511
Inventories 55,898,453 48,049,560
Prepaid expenses and other 19,374,640 18,274,096
------------ -------------
Total current assets 484,464,880 528,493,948
PLANT AND EQUIPMENT - NET 216,243,386 205,609,671
OTHER ASSETS
Long-term investments 106,621,165 155,384,009
Patents and other assets, net 9,048,241 8,535,052
------------ -------------
Total other assets 115,669,406 163,919,061
------------ -------------
Total assets $816,377,672 $898,022,680
============ ============
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES
Accounts payable $ 30,517,854 $ 30,531,649
Accrued liabilities 31,426,326 37,831,056
------------ -------------
Total current liabilities 61,944,180 68,362,705
DEFERRED INCOME TAXES 15,690,716 22,847,779
SHAREHOLDERS' INVESTMENT
Common stock 8,381,243 8,685,257
Additional paid-in capital 254,837,504 245,502,960
Retained earnings 474,561,978 530,290,281
Other shareholders' investment 962,051 22,333,698
------------ -------------
Total shareholders' investment 738,742,776 806,812,196
------------ -------------
Total liabilities and
shareholders' investment $816,377,672 $898,022,680
============ ============
See accompanying notes to condensed consolidated financial statements.
-2-
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------- ---------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
NET SALES $153,056,570 $162,524,803 $501,518,401 $483,210,597
COST OF GOODS SOLD 106,359,938 105,522,931 333,094,524 313,933,117
------------ ------------ ------------ ------------
Gross profit 46,696,632 57,001,872 168,423,877 169,277,480
OPERATING EXPENSES:
Engineering, research and development 13,101,431 13,251,945 39,236,174 37,974,076
Selling, general & administrative 10,324,190 9,112,808 30,139,806 26,212,009
------------ ------------ ------------ ------------
Total operating expenses 23,425,621 22,364,753 69,375,980 64,186,085
------------ ------------ ------------ ------------
Income from operations 23,271,011 34,637,119 99,047,897 105,091,395
OTHER INCOME (EXPENSE)
Interest and dividend income 2,949,412 5,139,536 10,249,623 14,458,180
Other, net (3,515,596) 4,076,418 (1,110,016) 12,739,080
------------ ------------ ------------ ------------
Total other income (expense) (566,184) 9,215,954 9,139,607 27,197,260
------------ ------------ ------------ ------------
Income before provision for income
taxes 22,704,827 43,853,073 108,187,504 132,288,655
PROVISION FOR INCOME TAXES 7,558,271 14,026,590 35,734,452 42,008,356
------------ ------------ ------------ ------------
NET INCOME $ 15,146,556 $ 29,826,483 $ 72,453,052 $ 90,280,299
============ ============ ============ ============
EARNINGS PER SHARE:
Basic $ 0.11 $ 0.21 $ 0.51 $ 0.63
Diluted $ 0.11 $ 0.21 $ 0.51 $ 0.63
Cash Dividends Declared per Share $ 0.110 $ 0.105 $ 0.320 $ 0.295
See accompanying notes to condensed consolidated financial statements.
-3-
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
2008 2007
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 72,453,052 $ 90,280,299
Adjustments to reconcile net income to net
cash provided by operating activities-
Depreciation and amortization 27,192,983 24,213,482
(Gain) loss on disposal of assets 674,471 302,960
(Gain) loss on sale of investments 899,317 (10,681,432)
Deferred income taxes 2,771,058 (2,230,860)
Stock-based compensation expense related to employee
stock options, employee stock purchases and
restricted stock 7,653,209 6,785,909
Excess tax benefits from stock-based compensation (62,647) (269,057)
Change in operating assets and liabilities:
Accounts receivable, net (6,762,945) (17,328,627)
Inventories (7,848,893) 1,401,927
Prepaid expenses and other 503,283 (2,765,530)
Accounts payable (13,795) 10,664,996
Accrued liabilities, excluding dividends declared (6,452,290) 823,952
------------- -------------
Net cash provided by (used for)
operating activities 91,006,803 101,198,019
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Plant and equipment additions (38,206,068) (38,936,917)
Proceeds from sale of plant and equipment 11,002 529,737
(Increase) decrease in investments 40,273,213 14,123,731
(Increase) decrease in other assets (774,474) (772,484)
------------- -------------
Net cash provided by (used for)
investing activities 1,303,673 (25,055,933)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock from stock plan transactions 11,693,703 36,279,027
Cash dividends paid (45,097,502) (40,748,764)
Repurchases of common stock (93,352,675) (7,328,015)
Excess tax benefits from stock-based compensation 62,647 269,057
------------- -------------
Net cash provided by (used for)
financing activities (126,693,827) (11,528,695)
------------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (34,383,351) 64,613,391
CASH AND CASH EQUIVALENTS, beginning of period 317,717,093 245,499,783
------------- -------------
CASH AND CASH EQUIVALENTS, end of period $ 283,333,742 $ 310,113,174
============= =============
See accompanying notes to condensed consolidated financial statements.
-4-
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) The unaudited condensed consolidated financial statements included herein
have been prepared by the Registrant, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to
such rules and regulations, although the Registrant believes that the
disclosures are adequate to make the information presented not misleading.
It is suggested that these unaudited condensed consolidated financial
statements be read in conjunction with the financial statements and notes
thereto included in the Registrant's 2007 annual report on Form 10-K.
(2) In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, consisting of
only a normal and recurring nature, necessary to present fairly the
financial position of the Registrant as of September 30, 2008, and the
results of operations and cash flows for the interim periods presented.
(3) Adoption of New Accounting Standards
In June 2008, the Financial Accounting Standards Board (FASB) issued FSP
No. EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities," (FSP EITF 03-6-1). FSP
EITF 03-6-1 states that unvested share-based payment awards that contain
nonforfeitable rights to dividends or dividend equivalents (whether paid or
unpaid) are participating securities and shall be included in the
computation of earnings per share pursuant to the two class method. FSP
EITF 03-6-1 becomes effective on January 1, 2009. The Company has concluded
that the adoption of FSP EITF 03-6-1 will not have a material impact on its
consolidated financial position or results of operations.
In September 2006, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 157, "Fair Value Measurements" ("SFAS No. 157"). This
statement establishes a framework for measuring the fair value of assets
and liabilities. This framework is intended to provide increased
consistency in how fair value determinations are made under various
existing accounting standards that permit, or in some cases require,
estimates of fair market value. SFAS No. 157 also expands financial
statement disclosure requirements about a company's use of fair value
measurements, including the effect of such measure on earnings. SFAS No.
157 was effective for fiscal years beginning after November 15, 2007.
The Company adopted the provisions of SFAS No. 157 related to its financial
assets and liabilities in the first quarter of 2008, which did not have a
material impact on the Company's consolidated financial position, results
of operations or cash flows. The Company's investment securities are
classified as available for sale and are stated at fair value based on
quoted market prices. Assets or liabilities that have recurring
measurements are shown below as of September 30, 2008:
Fair Value Measurements at Reporting Date Using
--------------------------------------------------
Quoted Prices in
Active Markets Significant Significant
for Identical Other Observable Unobservable
Assets Inputs Inputs
---------------- ---------------- ------------
Total as of
Description September 30, 2008 (Level 1) (Level 2) (Level 3)
----------------------- ------------------ ---------------- ---------------- ------------
Cash & Cash Equivalents $283,333,742 $283,333,742 $ -- $ --
Short-Term Investments 54,913,589 19,913,589 35,000,000 --
Long-Term Investments 106,621,165 106,621,165 -- --
------------ ------------ ----------- ----
Net $444,868,496 $409,868,496 $35,000,000 $ --
-5-
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
The Company's short-term investments primarily consist of Government
Securities (Level 1) and Certificate of Deposits (Level 2). Long-term
investments primarily consist of marketable equity securities.
(4) Inventories consisted of the following at the respective balance sheet
dates:
September 30, 2008 December 31, 2007
------------------ -----------------
Raw materials $38,024,137 $31,098,379
Work-in-process 5,408,450 4,555,058
Finished goods 12,465,866 12,396,123
----------- -----------
$55,898,453 $48,049,560
=========== ===========
(5) The following table reconciles the numerators and denominators used in the
calculation of basic and diluted earnings per share (EPS):
Quarter Ended Nine Months Ended
September 30, September 30,
--------------------------- ----------------------------
2008 2007 2008 2007
------------ ------------ ------------ -------------
Numerators:
Numerator for both basic and
diluted EPS, net income $ 15,146,556 $ 29,826,483 $ 72,453,052 $ 90,280,299
Denominators:
Denominator for basic EPS,
weighted-average shares
outstanding 140,233,348 143,496,082 141,913,581 142,740,287
Potentially dilutive shares
resulting from stock plans 210,304 1,346,546 301,412 958,975
------------ ------------ ------------ ------------
Denominator for diluted EPS 140,443,652 144,842,628 142,214,993 143,699,262
============ ============ ============ ============
Shares related to stock plans not
included in diluted average
common shares outstanding
because their effect would be
antidilutive 7,708,950 1,209,289 6,030,965 2,224,594
(6) Stock-Based Compensation Plans
At September 30, 2008, the Company had two stock option plans, a restricted
stock plan and an employee stock purchase plan. Readers should refer to
Note 6 of our consolidated financial statements in our Annual Report on
Form 10-K for the calendar year ended December 31, 2007, for additional
information related to these stock-based compensation plans.
The Company recognized compensation expense for share-based payments of
$2,135,781 and $6,200,322 for the third quarter and nine months ended
September 30, 2008, respectively. Compensation cost capitalized as part of
inventory as of September 30, 2008, was $96,721.
-6-
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
(6) Stock-Based Compensation Plans (continued)
Employee Stock Option Plan
The fair value of each option grant in the Employee Stock Option Plan was
estimated on the date of grant using the Black-Scholes option pricing model
with the following weighted-average assumptions for the indicated periods:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2008 2007 2008 2007
------ ------ ------ ------
Dividend yield 2.15% 2.00% 2.09% 1.99%
Expected volatility 31.57% 29.80% 30.89% 29.40%
Risk-free interest rate 2.98% 4.26% 2.94% 4.57%
Expected term of options (in years) 4.31 4.31 4.31 4.32
Weighted-average grant-date fair value $ 3.77 $ 5.39 $ 3.77 $ 4.97
The Company determined that all employee groups exhibit similar exercise
and post-vesting termination behavior to determine the expected term. Under
the plans, the option exercise price equals the stock's market price on
date of grant. The options vest after one to five years, and expire after
five to seven years.
As of September 30, 2008, there was $11,341,058 of unrecognized
compensation cost related to share-based payments which is expected to be
recognized over the vesting period with a weighted-average period of 4.1
years.
Non-employee Director Stock Option Plan
As of September 30, 2008, there was $75,101 of unrecognized compensation
cost under this plan related to share-based payments which is expected to
be recognized over the balance of the 2008 calendar year. Under the plan,
the option exercise price equals the stock's market price on date of grant.
The options vest after six months, and expire after ten years.
Employee Stock Purchase Plan
In 2003, a new Employee Stock Purchase Plan covering 1,200,000 shares was
approved by the shareholders, replacing a prior plan. Under the plan, the
Company sells shares at 85% of the stock's market price at date of
purchase. Under SFAS 123(R), the 15% discounted value is recognized as
compensation expense.
Restricted Stock Plan
In May of 2008, an amendment to the Company's Second Restricted Stock Plan
was approved by the Shareholders. The plan amendment increased the maximum
number of shares that may be subject to awards to 2,000,000 shares (in the
aggregate) and to change the Plan's termination date from March 2, 2011, to
February 21, 2018. The Company had granted 770,058 shares of restricted
stock prior to the plan amendment (net of cancellations). The purpose of
the Plan is to permit grants of shares, subject to restrictions, to key
employees of the Company as a means of retaining and rewarding them for
long-term performance and to increase their ownership in the Company.
Shares awarded under the plan entitle the shareholder to all rights of
common stock ownership except that the shares may not be sold, transferred,
pledged, exchanged or otherwise disposed of during the restriction period.
The restriction period is determined by the Compensation Committee,
appointed by the Board of Directors, but may not exceed ten years. As of
September 30, 2008, the Company had unearned stock-based compensation of
$4,815,266 associated with these restricted stock grants. The unearned
stock-based compensation related to these grants is being amortized to
compensation expense over the applicable restriction periods. Amortization
expense from restricted stock grants in the third quarter and nine months
ended September 30, 2008, were $483,066 and $1,452,887, respectively.
-7-
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
(7) Comprehensive income reflects the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
non-owner sources. For the Company, comprehensive income represents net
income adjusted for items such as unrealized gains and losses on
investments and foreign currency translation adjustments. Comprehensive
income was as follows:
September 30, 2008 September 30, 2007
------------------ ------------------
Quarter Ended $ 5,550,210 $31,155,687
Nine Months Ended $51,081,405 $95,026,188
(8) The decrease in common stock during the nine months ended September 30,
2008, was primarily due to the repurchase of 5,923,465 shares pursuant to
the Company's previously announced share repurchase plan for approximately
$93,353,000, partially offset by the issuance of 1,447,281 shares of the
Company's common stock under its stock-based compensation plans. The
Company has also recorded a $0.105 per share cash dividend in the first and
second quarters and a $0.11 per share cash dividend in the third quarter.
The third quarter dividend of approximately $15,366,000, was declared on
August 19, 2008, and was paid on October 17, 2008.
(9) The Company currently manufactures electro-optic products, including
automatic-dimming rearview mirrors for the automotive industry, and fire
protection products for the commercial building industry. The Company also
developed and manufactures variable dimmable windows for the aircraft
industry and non-auto dimming rearview automotive mirrors with electronic
features:
Quarter Ended Nine Months Ended
September 30, September 30,
--------------------------- ----------------------------
2008 2007 2008 2007
------------ ------------ ------------ -------------
Revenue:
Automotive Products $147,290,164 $156,528,289 $484,157,368 $ 464,827,910
Other 5,766,406 5,996,514 17,361,033 18,382,687
------------ ------------ ------------ -------------
Total $153,056,570 $162,524,803 $501,518,401 $ 483,210,597
============ ============ ============ =============
Income from Operations:
Automotive Products $ 23,292,326 $ 33,544,456 $ 99,229,035 $ 101,538,736
Other (21,315) 1,092,663 (181,138) 3,552,659
------------ ------------ ------------ -------------
Total $ 23,271,011 $ 34,637,119 $ 99,047,897 $105,091,395
============ ============ ============ =============
The "Other" segment includes Fire Protection Products and Dimmable Aircraft
Windows. Dimmable Aircraft Windows sales were immaterial during the third
quarter and nine months ended September 30, 2008, which resulted in reduced
income from operations for the "Other" category.
-8-
GENTEX CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS:
THIRD QUARTER 2008 VERSUS THIRD QUARTER 2007
Net Sales. Net sales for the third quarter of 2008 decreased by
approximately $9,468,000, or 6%, when compared with the third quarter last
year. Net sales of the Company's automotive mirrors decreased by
approximately $9,238,000, or 6%, in the third quarter of 2008, when
compared with the third quarter last year, primarily due to lower light
vehicle production levels in North America. Auto-dimming mirror unit
shipments decreased 5% from approximately 3,706,000 in the third quarter
2007 to 3,528,000 in the current quarter. Unit shipments to customers in
North America for the current quarter decreased by 27% compared with the
third quarter of the prior year, primarily due to lower light vehicle
production levels at the traditional Big Three automakers. Mirror unit
shipments for the current quarter to automotive customers outside North
America increased by 13% compared with the third quarter in 2007, primarily
due to increased penetration at certain European and Asian automakers. Net
sales of the Company's fire protection products decreased 7% for the
current quarter versus the same quarter of last year, primarily due to a
weak commercial construction market.
Cost of Goods Sold. As a percentage of net sales, cost of goods sold
increased from 64.9% in the third quarter of 2007 to 69.5% in the third
quarter of 2008. This percentage increase primarily reflected the Company's
inability to leverage fixed overhead costs due to weak light vehicle
production levels at our customers, annual customer price reductions, and
production inefficiencies due to last-minute customer order reductions,
which were partially offset by purchasing cost reductions. Each negative
and positive factor is estimated to have impacted cost of goods sold as a
percentage of net sales by 1-2 percentage points.
Operating Expenses. Engineering, research and development (E, R & D)
expenses for the current quarter decreased 1% and approximately $151,000
when compared with the same quarter last year. Excluding litigation
expenses of $1,579,000 in the third quarter of 2007 (see discussion under
"Trends & Developments"), E, R & D expenses increased 12% when comparing
the current quarter to the same quarter last year, primarily reflecting
additional staffing, engineering and testing for new product development,
including mirrors with additional features, such as SmartBeam(R) and Rear
Camera Display. Selling, general and administrative expenses increased 13%
and approximately $1,211,000, for the current quarter, when compared with
the third quarter of 2007, primarily due to the continued expansion of the
Company's overseas offices and foreign exchange rates. Foreign exchange
rates accounted for approximately three percentage points of the increase.
Total Other Income (expense). Total other income (expense) for the current
quarter decreased by approximately $9,782,000, or 106%, when compared with
the third quarter of 2007, primarily due to increased realized losses on
the sale of equity investments (which accounted for approximately
two-thirds of the decrease) and lower interest income due to lower interest
rates.
Taxes. The provision for income taxes varied from the statutory rate during
the current quarter, primarily due to the domestic manufacturing deduction.
Net Income. Net income for the third quarter of 2008 decreased by
approximately $14,680,000, or 49%, when compared with the same quarter last
year, primarily due to the reduced operating margin and the decrease in
total other income (expense).
NINE MONTHS ENDED SEPTEMBER 30, 2008, VERSUS NINE MONTHS ENDED SEPTEMBER
30, 2007
Net Sales. Net sales for the nine months ended September 30, 2008 increased
by approximately $18,308,000, or 4%, when compared with the same period
last year. Net sales of the Company's automotive mirrors increased by
approximately $19,329,000, or 4% period over period, as auto-dimming mirror
unit shipments increased by 2% from approximately 11,358,000 in the first
nine months of 2007 to 11,593,000 units in the first nine months of 2008.
This increase primarily reflected the increased penetration of interior and
exterior auto-dimming mirrors on
-9-
2008 model year vehicles with overseas customers. Unit shipments to
customers in North America decreased by13% during the first nine months of
2008 versus the same period in 2007, primarily due to lower light vehicle
production levels at the traditional Big Three automakers and the UAW
strikes. The UAW strikes negatively impacted automotive revenues by
approximately $8.3 million during the first nine months of 2008 versus the
same period in 2007. Mirror unit shipments to automotive customers outside
North America increased by 14% year-over-year, primarily due to increased
penetration at certain European and Asian automakers. Net sales of the
Company's fire protection products decreased 7% year-over-year, primarily
due to a weak commercial construction market.
Cost of Goods Sold. As a percentage of net sales, cost of goods sold
increased from 65% in the nine months ended September 30, 2007, to 66.4% in
the nine months ended September 30, 2008, primarily reflecting the impact
of annual automotive customer price reductions and the inability to
leverage the Company's fixed overhead costs, partially offset by purchasing
cost reductions and foreign exchange rates. Each factor is estimated to
have impacted cost of goods sold as a percentage of net sales by
approximately 1-2%.
Operating Expenses. For the nine months ended September 30, 2008,
engineering, research and development expenses increased approximately
$1,262,000, but remained at 8% of net sales, when compared to the same
period last year. Excluding litigation expenses of $104,000 and the
litigation judgment accrual reversal of approximately $335,000 for the nine
months ended September 30, 2008, and excluding litigation expenses of
approximately $4,430,000 for the same period last year (see discussion
under "Trends and Developments"), E, R & D expenses increased by 18% when
comparing the first nine months of 2008 with the same period last year,
primarily due to additional staffing, engineering and testing for new
product development, including mirrors with additional features. Selling,
general and administrative expenses increased 15% and approximately
$3,928,000 for the nine months ended September 30, 2008, and increased from
5% to 6% of net sales period over period, primarily reflecting the
continued expansion of the Company's overseas offices and foreign exchange
rates. Foreign exchange rates accounted for approximately four percentage
points of the increase in selling, general and administrative expenses.
Total Other Income. Total other income for the nine months ended September
30, 2008, decreased approximately $18,058,000 when compared to the same
period last year, primarily due to increased realized losses on the sale of
equity investments (which accounted for approximately two-thirds of the
decrease) and lower interest income due to lower interest rates.
Taxes. The provision for income taxes varied from the statutory rate during
the nine months ended September 30, 2008, primarily due to the domestic
manufacturing deduction.
Net Income. Net income decreased by approximately $17,827,000, or 20% for
the nine months ended September 30, 2008, when compared with the same
period last year, primarily due to the decrease in total other income and
the reduced operating margin.
FINANCIAL CONDITION:
Cash flow from operating activities for the nine months ended September 30,
2008, decreased approximately $10,191,000 to $91,007,000, compared to
$101,198,000, for the same period last year, primarily due a decrease in
net income. Capital expenditures for the nine months ended September 30,
2008, were $38,206,000, compared to $38,937,000 for the same period last
year.
Cash and cash equivalents as of September 30, 2008, decreased approximately
$34,383,000 compared to December 31, 2007. The decrease was primarily due
to share repurchases and dividends paid, partially offset by cash flow from
operations and short-term investment maturities.
Inventories as of September 30, 2008, increased approximately $7,849,000
compared to December 31, 2007. The increase was primarily due to longer
lead times on certain electronic components in conjunction with last-minute
order release reductions at our customers (including their Tier 1
suppliers).
-10-
Long-term investments as of September 30, 2008, decreased approximately
$48,763,000 compared to December 31, 2007. The decrease was primarily due
to a decrease in unrealized gains in equity investments given current
market conditions. Management considers the Company's working capital and
long-term investments totaling approximately $529,142,000 as of September
30, 2008, together with internally generated cash flow and an unsecured
$5,000,000 line of credit from a bank, to be sufficient to cover
anticipated cash needs for the next year and for the foreseeable future.
On October 8, 2002, the Company announced a share repurchase plan, under
which it may purchase up to 8,000,000 shares (post-split) based on a number
of factors, including market conditions, the market price of the Company's
common stock, anti-dilutive effect on earnings, available cash and other
factors that the Company deems appropriate. On July 20, 2005, the Company
announced that it had raised the price at which the Company may repurchase
shares under the existing plan. On May 16, 2006, the Company announced that
the Company's Board of Directors had authorized the repurchase of an
additional 8,000,000 shares under the plan. On August 14, 2006, the Company
announced that the Company's Board of Directors had authorized the
repurchase of an additional 8,000,000 shares under the plan. And, on
February 26, 2008, the Company announced that the Company's Board of
Directors had authorized the repurchase of an additional 4,000,000 shares
under the plan.
The following is a summary of quarterly share repurchase activity under the
plan to date:
Total Number of
Shares Purchased Cost of
Quarter Ended (Post-Split) Shares Purchased
------------- ---------------- ----------------
March 31, 2003 830,000 $ 10,246,810
September 30, 2005 1,496,059 25,214,573
March 31, 2006 2,803,548 47,145,310
June 30, 2006 7,201,081 104,604,414
September 30, 2006 3,968,171 55,614,102
December 31, 2006 1,232,884 19,487,427
March 31, 2007 447,710 7,328,015
March 31, 2008 2,200,752 34,619,490
June 30, 2008 1,203,560 19,043,775
September 30, 2008 2,519,153 39,689,410
---------- ------------
Total 23,902,918 $362,993,326
4,097,082 shares remain authorized to be repurchased under the plan.
CRITICAL ACCOUNTING POLICIES:
The preparation of the Company's consolidated condensed financial
statements contained in this report, which have been prepared in accordance
with accounting principles generally accepted in the Unites States,
requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. On an
ongoing basis, management evaluates these estimates. Estimates are based on
historical experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities
that may not be readily apparent from other sources. Historically, actual
results have not been materially different from the Company's estimates.
However, actual results may differ from these estimates under different
assumptions or conditions.
The Company has identified the critical accounting policies used in
determining estimates and assumptions in the amounts reported in its
Management's Discussion and Analysis of Financial Condition and Results of
Operations in its Annual Report on Form 10-K for the fiscal year ended
December 31, 2007. Management believes there have been no significant
changes in those critical accounting policies.
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TRENDS AND DEVELOPMENTS:
The Company previously announced certain development programs with several
automakers for its Rear Camera Display (RCD) Mirror that consists of a
proprietary liquid crystal display (LCD) that shows a panoramic video of
objects behind the vehicle in real time. In addition, the Company
previously announced a number of OEM and dealer or port-installed programs
for its RCD Mirror. The Company recently announced that its RCD Mirror will
be available as factory-installed equipment on the 2009 Toyota Tacoma and
FJ Cruiser. The Company also announced that its RCD Mirror is now available
through Mito Corporation, a distributor of high-quality aftermarket
electronic products and accessories.
On February 14, 2008, the President signed into law the "Kids
Transportation Safety Act of 2007". The Bill ordered the Secretary of
Transportation at the National Highway Traffic Safety Administration
(NHTSA) to initiate rulemaking to revise the federal standard to expand the
field of view so that drivers can detect objects directly behind vehicles.
The Bill states that the requirements may be met by the use of additional
mirrors, sensors, cameras or other technology to increase the driver's
field of view. The Company's RCD Mirror is a cost competitive product that
is relatively easy to implement and may be among the technologies that
NHTSA will include as a means to meet the requirements of the legislation.
The Company previously announced it is shipping auto-dimming mirrors with
SmartBeam, its proprietary intelligent high-beam headlamp assist feature,
to General Motors, Chrysler, BMW and Audi for a number of vehicle programs.
The Company recently announced that SmartBeam will be offered on the 2009
Chrysler Town & Country minivan and the all-new BMW X6 as a stand-alone
option. The Company also announced that SmartBeam will be available
throughout Europe on the 2009 Opel Insignia in combination with
Opel/Vauxhall's Advanced Forward Lighting, Bi-Xenon headlamp system.
During 2005, the Company reached an agreement with PPG Aerospace to work
together to provide the variable dimmable windows for the passenger
compartment on the new Boeing 787 Dreamliner series of aircraft. Gentex
will ship about 100 windows for the passenger compartment of each 787. The
Company believes that the commercially viable market for variable dimmable
windows is currently limited to the aerospace industry. The Company began
shipping parts for test planes in mid-2007. Boeing expects the first planes
to go into service in late 2009. Due to the ongoing Boeing machinists
strike, we now anticipate that we will begin to deliver our windows to the
production line in 2009. The Company and PPG Aerospace recently announced
that it will supply dimmable windows to Hawker Beechcraft Corporation for
the passenger-cabin windows of the 2010 Beechcraft King Air 350i airplane.
The Company has a long-term agreement with General Motors (GM) in the
ordinary course of the Company's business. Under the agreement, the Company
was sourced virtually all the interior auto-dimming rearview mirror
programs for GM and its worldwide affiliates through August 2009. During
the quarter ended September 30, 2008, the Company negotiated an extension
to the existing agreement, through August 1, 2012, in the ordinary course
of the Company's business.
The Company currently expects that top line revenue growth for the fourth
quarter of 2008 will be approximately 15% lower, compared with the same
period in 2007. These estimates are based on current light vehicle
production forecasts in the regions to which the Company ships product, as
well as the estimated option rates for its mirrors on prospective vehicle
models. Uncertainties include light vehicle production levels, extended
automotive plant shutdowns, sales rates in North America, Europe and Asia,
and the impact of potential automotive customer (including their Tier 1
suppliers) work stoppages, strikes, etc., which could disrupt our shipments
to these customers, making forecasting difficult. Currently, it is an
extremely difficult environment to forecast due to uncertainties associated
with the global economy, financial markets and the uncertain light vehicle
production environment. The Company also estimates that engineering,
research and development expenses, excluding Muth litigation costs, are
currently expected to increase approximately 10% in the fourth quarter of
2008 compared with the same period in 2007. Selling, general and
administrative expenses are currently expected to increase approximately
10-15% in the fourth quarter of 2008 compared with the same period in 2007.
The Company utilizes the light vehicle production forecasting services of
CSM Worldwide, and CSM's current mid-October forecasts for light vehicle
production for calendar year 2008 are approximately 12.9 million units for
North America, 21.5 million for Europe and 14.8 million for Japan and
Korea.
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The Company is subject to increased market risk exposures of varying
correlations and volatilities due to the turmoil in the financial markets,
including foreign exchange rate risk, interest rate risk and equity price
risk. During the quarter ended September 30, 2008, there were no material
changes in the risk factors previously disclosed in the Company's report on
Form 10-K for the fiscal year ended December 31, 2007.
The Company has some assets, liabilities and operations outside the United
States, which currently are not significant. Because the Company sells its
automotive mirrors throughout the world, the Company is significantly
affected by weak economic conditions in worldwide markets that are reducing
demand for its products.
The Company continues to experience significant pricing pressures from its
automotive customers, which have affected, and which will continue to
affect, its margins to the extent that the Company is unable to offset the
price reductions with productivity or yield improvements, engineering and
purchasing cost reductions, and increases in unit sales volume, all of
which continue to be a challenge in the current automotive production
environment. In addition, financial pressures at certain automakers are
resulting in increased cost reduction efforts by them, including requests
for additional price reductions, decontenting certain features from
vehicles, customer market testing of future business, dual sourcing
initiatives and warranty cost-sharing programs, which could adversely
impact the Company's sales growth, margins, profitability and, as a result,
our share price. The Company also continues to experience some
manufacturing yield issues and pressure for select raw material cost
increases. In addition to the foregoing, the Company is planning for a new
computer system which has the potential for implementation issues during
2009. The automotive industry is cyclical and highly impacted by levels of
economic activity, which in the current environment is causing increased
financial and production stresses evidenced by continuing pricing
pressures, lower domestic production levels (especially in the pickup truck
and SUV segment in North America due to high fuel prices), consumer
preference shift to smaller vehicles where Gentex has a lower penetration
rate and lower content per vehicle due to higher fuel prices, supplier and
potential OEM bankruptcies, and commodity material cost increases. If the
Company's automotive customers (including their Tier 1 suppliers)
experience work stoppages, strikes, etc. due to their union contracts or
other negotiations, it could disrupt the Company's shipments to these
customers, which adversely affect the Company's sales, margins,
profitability and, as a result, our share price.
Automakers have also been experiencing increased volatility and uncertainty
in executing planned new programs which have, in some cases, resulted in
cancellations or delays of new vehicle platforms, package reconfigurations
and inaccurate volume forecasts. This increased volatility and uncertainty
has made it more difficult for the Company to forecast future sales,
effectively manage costs and utilize capital, engineering, research and
development, and human resource investments.
In light of the financial stresses within the worldwide automotive
industry, certain automakers and tier one mirror customers are considering
the sale of certain business segments and/or may be considering bankruptcy.
Should one or more of the Company's larger customers (including their tier
1 suppliers) sell their business or declare bankruptcy, it could adversely
affect the collection of receivables, our sales, margins, profitability
and, as a result, the Company's share price.
The Company does not have any significant off-balance sheet arrangements or
commitments that have not been recorded in its consolidated financial
statements.
The Company was involved in litigation with K. W. Muth and Muth Mirror
Systems LLC relating to exterior mirrors with turn signal indicators. The
turn signal feature in exterior mirrors that was the subject of the
litigation represents approximately one percent of the Company's revenues,
and the litigation did not involve core Gentex electrochromic technology.
The trial in Wisconsin related to this case occurred in July 2007 and the
Court issued its written ruling in December 2007. The Court found that
Muth's U.S. patent No. 6,005,724 was invalid and unenforceable, and that
Gentex's Razor Turn Signal Mirror did not infringe that patent. The Court
also denied all but one of Muth's other motions with prejudice, including
its motion for an injunction, and its claims for tortious interference with
its business relationships. The sole point of liability for Gentex was that
the Court found that Gentex breached one provision of the alliance
agreement it has with Muth, and entered a judgment against Gentex, on
January 24, 2008, granting Muth damages in the amount of $2,885,000, which
was accrued by the Company as of December 31, 2007. On February 15, 2008,
the Company entered into a Settlement And Release And Covenants Not To Sue
("Agreement") with Muth whereby the parties agreed to settle the Court's
judgment against the Company for damages at a reduced amount of $2,550,000.
In addition, under the Agreement the parties each
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agreed to: grant the other party a ten-year covenant not to sue for each
Company's core business, to release each other from all claims that
occurred in the past, and not appeal the Court's rulings. The Agreement was
approved by the Bankrupcty Court on February 29, 2008. The adjustment to
the original judgment for damages is reflected in our first quarter
financial results as a reduction to engineering, research and development
expenses.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information called for by this item is provided under the caption
"Trends and Developments" under Item 2 - Management's Discussion and
Analysis of Financial Condition and Results of Operations.
ITEM 4. CONTROLS AND PROCEDURES.
The Company's management, with the participation of its principal executive
officer and principal financial officer, has evaluated the effectiveness,
as of September 30, 2008, of the Company's "disclosure controls and
procedures," as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based
upon that evaluation, the Company's management, including the principal
executive officer and principal financial officer, concluded that the
Company's disclosure controls and procedures, as of September 30, 2008,
were adequate and effective such that the information required to be
disclosed by the Company in the reports filed or submitted by it under the
Exchange Act is recorded, processed, summarized, and reported within the
time periods specified in the Securities and Exchange Commission's rules
and forms, and information required to be disclosed by the Company in such
reports is accumulated and communicated to the Company's management,
including its principal executive officer and principal financial officer,
as appropriate to allow timely decisions regarding required disclosure.
In the ordinary course of business, the Company may routinely modify,
upgrade, and enhance its internal controls and procedures over financial
reporting. However, there was no change in the Company's "internal control
over financial reporting" [as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act] that occurred during the quarter ended
September 30, 2008, that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial
reporting.
SAFE HARBOR STATEMENT:
Statements in this Quarterly Report on Form 10-Q contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act, as amended,
that are based on management's belief, assumptions, current expectations,
estimates and projections about the global automotive industry, the
economy, the impact of stock option expense, the ability to leverage fixed
manufacturing overhead costs, unit shipment and revenue growth rates, the
ability to control E,R&D and S,G&A expenses, gross margins and the Company
itself. Words like "anticipates," "believes," "confident," "estimates,"
"expects," "forecast," "likely," "plans," "projects," and "should," and
variations of such words and similar expressions identify forward-looking
statements. These statements do not guarantee future performance and
involve certain risks, uncertainties, and assumptions that are difficult to
predict with regard to timing, expense, likelihood and degree of
occurrence. These risks include, without limitation, employment and general
economic conditions, the pace of automotive production worldwide, the
maintenance of the Company's market share, the ability to achieve
purchasing cost reductions, competitive pricing pressures, currency
fluctuations, interest rates, equity prices, the financial strength of the
Company's customers, supply chain disruptions, potential sale of OEM
business segments or suppliers, the mix of products purchased by customers,
the ability to continue to make product innovations, the success of certain
newer products (e.g. SmartBeam, Z-Nav(R) and Rear Camera Display Mirror),
and other risks identified in the Company's filings with the Securities and
Exchange Commission. Therefore, actual results and outcomes may materially
differ from what is expressed or forecasted. Furthermore, the Company
undertakes no obligation to update, amend, or clarify forward-looking
statements, whether as a result of new information, future events, or
otherwise.
-14-
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS.
Information regarding risk factors appears in Management's Discussion and
Analysis of Financial Condition and Results of Operations in Part I - Item 2 of
this Form 10-Q and in Part I - Item 1A - Risk Factors of the Company's report on
Form 10-K for the fiscal year ended December 31, 2007. There have been no
material changes from the risk factors previously disclosed in the Company's
report on Form 10-K for the year ended December 31, 2007.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
(c) Issuer Purchases of Equity Securities
The following is a summary of share repurchase activity during the
third quarter ended September 30, 2008:
Total Number of Maximum Number of
Total Number Average Price Shares Purchased As Shares That May Yet
Of Shares Paid Per Part of a Publicly Be Purchased Under
Period Purchased Share Announced Plan the Plan
------ ------------ ------------- ------------------- -------------------
July 2008 550,015 $15.44 550,015 6,066,220
August 2008 1,481,346 $15.71 1,481,346 4,584,874
September 2008 487,792 $16.26 487,792 4,097,082
--------- ---------
Total 2,519,153 2,519,153
On October 8, 2002, the Company announced a share repurchase plan,
under which it may purchase up to 8,000,000 shares (post-split) based
on a number of factors, including market conditions, the market price
of the Company's common stock, anti-dilutive effect on earnings,
available cash and other factors that the Company deems appropriate.
This share repurchase plan does not have an expiration date. On July
20, 2005, the Company announced that it had raised the price at which
the Company may repurchase shares under the existing plan. On May 16,
2006, the Company announced that the Company's Board of Directors had
authorized the repurchase of an additional 8,000,000 shares under the
plan. On August 14, 2006, the Company announced that the Company's
Board of Directors had authorized the repurchase of an additional
8,000,000 shares under the plan. On February 26, 2008, the Company
announced that the Company's Board of Directors had authorized the
repurchase of an additional 4,000,000 shares under the plan.
Cumulatively, the Company has repurchased 23,902,918 shares at a cost
of $362,993,326 under the plan to date (see below). 4,097,082 shares
remain authorized to be repurchased under the plan.
Total Number of
Shares Purchased Cost of
Quarter Ended (Post-Split) Shares Purchased
------------- ---------------- ----------------
March 31, 2003 830,000 $10,246,810
September 30, 2005 1,496,059 25,214,573
March 31, 2006 2,803,548 47,145,310
June 30, 2006 7,201,081 104,604,414
September 30, 2006 3,968,171 55,614,102
December 31, 2006 1,232,884 19,487,427
March 31, 2007 447,710 7,328,015
March 31, 2008 2,200,752 34,619,490
June 30, 2008 1,203,560 19,043,775
September 30, 2008 2,519,153 39,689,410
---------- ------------
Total 23,902,918 $362,993,326
ITEM 6. EXHIBITS
See Exhibit Index on Page 17.
-15-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENTEX CORPORATION
Date: November 4, 2008 /s/ Fred T. Bauer
----------------------------------------
Fred T. Bauer
Chairman and Chief
Executive Officer
Date: November 4, 2008 /s/ Steven A. Dykman
----------------------------------------
Steven A. Dykman
Vice President - Finance,
Principal Financial and
Accounting Officer
-16-
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
----------- ------------------------------------------------------------------ ----
3(a) Registrant's Restated Articles of Incorporation, adopted on August
20, 2004, were filed as Exhibit 3(a) to Registrant's Report on
Form 10-Q dated November 2, 2004, and the same is hereby
incorporated herein by reference.
3(b) Registrant's Bylaws as amended and restated February 27, 2003,
were filed as Exhibit 3(b)(1) to Registrant's Report on Form 10-Q
dated May 5, 2003, and the same are hereby incorporated herein by
reference.
4(a) A specimen form of certificate for the Registrant's common stock,
par value $.06 per share, was filed as part of a Registration
Statement on Form S-8 (Registration No. 2-74226C) as Exhibit 3(a),
as amended by Amendment No. 3 to such Registration Statement, and
the same is hereby incorporated herein by reference.
4(b) Amended and Restated Shareholder Protection Rights Agreement,
dated as of March 29, 2001, including as Exhibit A the form of
Certificate of Adoption of Resolution Establishing Series of
Shares of Junior Participating Preferred Stock of the Company, and
as Exhibit B the form of Rights Certificate and of Election to
Exercise, was filed as Exhibit 4(b) to Registrant's Report on Form
10-Q dated April 27, 2001, and the same is hereby incorporated
herein by reference.
10(a)(1) A Lease dated August 15, 1981, was filed as part of a Registration
Statement on Form S-1 (Registration Number 2-74226C) as Exhibit
9(a)(1), and the same is hereby incorporated herein by reference.
10(a)(2) First Amendment to Lease dated June 28, 1985, was filed as Exhibit
10(m) to Registrant's Report on Form 10-K dated March 18, 1986,
and the same is hereby incorporated herein by reference.
*10(b)(1) Gentex Corporation Qualified Stock Option Plan (as amended and
restated, effective February 26, 2004) was included in
Registrant's Proxy Statement dated April 6, 2004, filed with the
Commission on April 6, 2004, which is hereby incorporated herein
by reference.
*10(b)(2) First Amendment to Gentex Corporation Stock Option Plan (as
amended and restated February 26, 2004) was filed as Exhibit
10(b)(2) to Registrant's Report on Form 10-Q dated August 2, 2005,
and the same is hereby incorporated herein by reference.
*10(b)(3) Specimen form of Grant Agreement for the Gentex Corporation
Qualified Stock Option Plan (as amended and restated, effective
February 26, 2004) was filed as Exhibit 10(b)(3) to Registrant's
Report on Form 10-Q dated November 1, 2005, and the same is hereby
incorporated herein by reference.
*10(b)(4) Gentex Corporation Second Restricted Stock Plan was filed as
Exhibit 10(b)(2) to Registrant's Report on Form 10-Q dated April
27, 2001, and the same is hereby incorporated herein by reference.
*10(b)(5) First Amendment to the Gentex Corporation Second Restricted Stock
Plan was filed as Exhibit 10(b)(5) to Registrant's Report on Form
10-Q dated August 4, 2008, and the same is hereby incorporated
herein by reference.
*10(b)(6) Specimen form of Grant Agreement for the Gentex Corporation
Restricted Stock Plan, was filed as Exhibit 10(b)(4) to
Registrant's Report on Form 10-Q dated November 2, 2004, and the
same is hereby incorporated herein by reference.
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EXHIBIT NO. DESCRIPTION PAGE
----------- ------------------------------------------------------------------ ----
*10(b)(7) Gentex Corporation 2002 Non-Employee Director Stock Option Plan
(adopted March 6, 2002), was filed as Exhibit 10(b)(4) to
Registrant's Report on Form 10-Q dated April 30, 2002, and the
same is incorporated herein by reference.
*10(b)(8) Specimen form of Grant Agreement for the Gentex Corporation 2002
Non-Employee Director Stock Option Plan, was filed as Exhibit
10(b)(6) to Registrant's Report on Form 10-Q dated November 2,
2004, and the same is hereby incorporated herein by reference.
10(c) The form of Indemnity Agreement between Registrant and each of the
Registrant's directors and certain officers was filed as Exhibit
10 (e) to Registrant's Report on Form 10-Q dated October 31, 2002,
and the same is incorporated herein by reference.
31.1 Certificate of the Chief Executive Officer of Gentex Corporation
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. 1350). 19
31.2 Certificate of the Chief Financial Officer of Gentex Corporation
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. 1350). 20
32 Certificate of the Chief Executive Officer and Chief Financial
Officer of Gentex Corporation pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) 21
* Indicates a compensatory plan or arrangement.
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